Hargreaves Lansdown Faces Headwinds as Volume Slump

Summary:
• Hargreaves Lansdown, the giant London-listed financial services company, is struggling as demand for its services wane.

Hargreaves Lansdown, the giant London-listed financial services company, is struggling as demand for its services wane. As a result, its shares have slipped by more than 50% from their highest level in 2021, giving it a market cap of over 4.2 billion pounds.

Trading and investing demand down

Hargreaves Lansdown is a leading financial services company that provides numerous solutions like investing, pensions and retirement, ISAs, and financial advice.

Earlier this month, the company said that its revenue dropped by 8% to 583 million pounds in the first half of the year. In the same period, profit before tax fell by 26% to 269 million pounds while its dividend per share dropped by 21%.

In addition, the total assets under administration dropped by 9% to 123.8 billion pounds in the first half while the number of new clients rose to 92,000 to 1.7 million.

Hargreaves Lansdown business is struggling because of the ongoing performance of the financial market. FTSE 100 has dropped by over 10% this year while other global indices like Nasdaq 100 and S&P 500 have all slipped. This performance is mostly because of the extremely hawkish Federal Reserve and Bank of England.

Analysts are hopeful

City analysts are hopeful that Hargreaves Lansdown share price will bounce back. The average estimate for the stock is 1,052p, which is higher than the current 900p.

For example, analysts at Berenberg Bank boosted their outlook for the stock from 925p to 1,000p. They cited the company’s cheap valuation and potential for a turnaround. 

Analysts at Citigroup expect the shares will rise to 1,000p while those at Barclays see it rising to 1,225p. The latter ones boosted their outlook from 1,175p. Credit Suisse and Royal Bank of Canada see the Hargreaves Lansdown share price rising to 1,430p and 1,650p, respectively.

Hargreaves Lansdown and other traditional brokers have lagged the performance of firms that provide forex and CFD services. For example, IG Group, Exness, and Plus500 recently published strong results.